IDEAS home Printed from https://ideas.repec.org/p/hal/journl/halshs-01249514.html
   My bibliography  Save this paper

Reason-based choice and context-dependence: An explanatory framework

Author

Listed:
  • Franz Dietrich

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Christian List

    (LSE - London School of Economics and Political Science)

Abstract

We introduce a "reason-based" framework for explaining and predicting individual choices. The key idea is that a decision-maker focuses on some but not all properties of the options and chooses an option whose "motivationally salient" properties he/she most prefers. Reason-based explanations can capture two kinds of context-dependent choice: (i) the motivationally salient properties may vary across choice contexts, and (ii) they may include "context-related" properties, not just "intrinsic" properties of the options. Our framework allows us to explain boundedly rational and sophisticated choice behaviour. Since properties can be recombined in new ways, it also offers resources for predicting choices in unobserved contexts.

Suggested Citation

  • Franz Dietrich & Christian List, 2016. "Reason-based choice and context-dependence: An explanatory framework," Post-Print halshs-01249514, HAL.
    • Handle: RePEc:hal:journl:halshs-01249514
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01249514
    as

    Download full text from publisher

    File URL: https://shs.hal.science/halshs-01249514/document
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Laura Blow & Martin Browning & Ian Crawford, 2008. "Revealed Preference Analysis of Characteristics Models," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 75(2), pages 371-389.
    2. Simonson, Itamar, 1989. "Choice Based on Reasons: The Case of Attraction and Compromise Effects," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 16(2), pages 158-174, September.
    3. B. Douglas Bernheim, 2009. "Behavioral Welfare Economics," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 267-319, 04-05.
    4. Mandler, Michael & Manzini, Paola & Mariotti, Marco, 2012. "A million answers to twenty questions: Choosing by checklist," Journal of Economic Theory, Elsevier, vol. 147(1), pages 71-92.
    5. Franz Dietrich & Christian List, 2013. "Where do preferences come from?," International Journal of Game Theory, Springer;Game Theory Society, vol. 42(3), pages 613-637, August.
    6. repec:hal:wpaper:halshs-01249632 is not listed on IDEAS
    7. Richard Blundell, 2005. "Presidential Address: How Revealing Is Revealed Preference?," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 211-235, 04/05.
    8. Gil Kalai & Ariel Rubinstein & Ran Spiegler, 2002. "Rationalizing Choice Functions By Multiple Rationales," Econometrica, Econometric Society, vol. 70(6), pages 2481-2488, November.
    9. Botond Kőszegi & Matthew Rabin, 2006. "A Model of Reference-Dependent Preferences," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(4), pages 1133-1165.
    10. Dietrich, Franz & List, Christian, 2009. "A reason-based theory of rational choice," MPRA Paper 36112, University Library of Munich, Germany, revised 2011.
    11. Amos Tversky & Daniel Kahneman, 1991. "Loss Aversion in Riskless Choice: A Reference-Dependent Model," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(4), pages 1039-1061.
    12. Ariel Rubinstein, 2006. "Lecture Notes in Microeconomic Theory," Online economics textbooks, SUNY-Oswego, Department of Economics, number gradmicro1.
    13. Franz Dietrich & Christian List, 2011. "A model of non-informational preference change," Journal of Theoretical Politics, , vol. 23(2), pages 145-164, April.
    14. B. Douglas Bernheim & Antonio Rangel, 2009. "Beyond Revealed Preference: Choice-Theoretic Foundations for Behavioral Welfare Economics," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(1), pages 51-104.
    15. Yuval Salant & Ariel Rubinstein, 2008. "(A, f): Choice with Frames -super-1," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 75(4), pages 1287-1296.
    16. , & ,, 2012. "Reason-based choice: a bargaining rationale for the attraction and compromise effects," Theoretical Economics, Econometric Society, vol. 7(1), January.
    17. Wulf Gaertner & Yongsheng Xu, 2004. "Procedural choice," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 24(2), pages 335-349, August.
    18. Franz Dietrich & Christian List, 2013. "Where do preferences come from? A summary," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00978022, HAL.
    19. Bossert, Walter & Suzumura, Kotaro, 2010. "Consistency, Choice, and Rationality," Economics Books, Harvard University Press, number 9780674052994, Spring.
    20. Dietrich, Franz & List, Christian, 2016. "Mentalism Versus Behaviourism In Economics: A Philosophy-Of-Science Perspective," Economics and Philosophy, Cambridge University Press, vol. 32(2), pages 249-281, July.
    21. Yusufcan Masatlioglu & Daisuke Nakajima & Erkut Y. Ozbay, 2012. "Revealed Attention," American Economic Review, American Economic Association, vol. 102(5), pages 2183-2205, August.
    22. Gold, Natalie & List, Christian, 2004. "Framing as Path Dependence," Economics and Philosophy, Cambridge University Press, vol. 20(2), pages 253-277, October.
    23. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74(2), pages 132-132.
    24. Huber, Joel & Payne, John W & Puto, Christopher, 1982. "Adding Asymmetrically Dominated Alternatives: Violations of Regularity and the Similarity Hypothesis," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 9(1), pages 90-98, June.
    25. W. M. Gorman, 1980. "A Possible Procedure for Analysing Quality Differentials in the Egg Market," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(5), pages 843-856.
    26. repec:hal:pseose:halshs-01249632 is not listed on IDEAS
    27. Amos Tversky & Itamar Simonson, 1993. "Context-Dependent Preferences," Management Science, INFORMS, vol. 39(10), pages 1179-1189, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Franz Dietrich & Antonios Staras & Robert Sugden, 2021. "Savage’s response to Allais as Broomean reasoning," Journal of Economic Methodology, Taylor & Francis Journals, vol. 28(2), pages 143-164, April.
    2. Guilhem Lecouteux & Ivan Mitrouchev, 2021. "The "View from Manywhere": Normative Economics with Context-Dependent Preferences," GREDEG Working Papers 2021-19, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    3. Gold, Natalie, 2020. "How should we reconcile self-regarding and pro-social motivations? A renaissance of “Das Adam Smith Problem”," LSE Research Online Documents on Economics 109218, London School of Economics and Political Science, LSE Library.
    4. repec:hal:wpaper:halshs-01249632 is not listed on IDEAS
    5. Natalie Gold, 2019. "The limits of commodification arguments: Framing, motivation crowding, and shared valuations," Politics, Philosophy & Economics, , vol. 18(2), pages 165-192, May.
    6. Dino Borie & Dorian Jullien, 2019. "Description-dependent Choices," Working Papers halshs-01651086, HAL.
    7. Kadziński, Miłosz & Ghaderi, Mohammad & Dąbrowski, Maciej, 2020. "Contingent preference disaggregation model for multiple criteria sorting problem," European Journal of Operational Research, Elsevier, vol. 281(2), pages 369-387.
    8. Borie, Dino & Jullien, Dorian, 2020. "Description-dependent preferences," Journal of Economic Psychology, Elsevier, vol. 81(C).
    9. Dietrich, Franz, 2018. "Savage's theorem under changing awareness," Journal of Economic Theory, Elsevier, vol. 176(C), pages 1-54.
    10. Gold, Natalie, 2019. "The limits of commodification arguments: framing, motivation crowding, and shared valuations," LSE Research Online Documents on Economics 109238, London School of Economics and Political Science, LSE Library.
    11. Olivier Cailloux & Yves Meinard, 2020. "A formal framework for deliberated judgment," Theory and Decision, Springer, vol. 88(2), pages 269-295, March.
    12. Boissonnet, Niels & Ghersengorin, Alexis & Gleyze, Simon, 2020. "Revealed Deliberate Preference Changes," MPRA Paper 101756, University Library of Munich, Germany.
    13. Boissonnet, Niels & Ghersengorin, Alexis & Gleyze, Simon, 2023. "Revealed deliberate preference change," Games and Economic Behavior, Elsevier, vol. 142(C), pages 357-367.
    14. repec:hal:pseose:halshs-01249632 is not listed on IDEAS
    15. Niels Boissonnet & Alexis Ghersengorin & Simon Gleyze, 2022. "Revealed Deliberate Preference Change," Working Papers hal-03672734, HAL.
    16. Jiapeng Liu & Miłosz Kadziński & Xiuwu Liao, 2023. "Modeling Contingent Decision Behavior: A Bayesian Nonparametric Preference-Learning Approach," INFORMS Journal on Computing, INFORMS, vol. 35(4), pages 764-785, July.
    17. Franz Dietrich & Antonios Staras & Robert Sugden, 2021. "Savage’s response to Allais as Broomean reasoning," Journal of Economic Methodology, Taylor & Francis Journals, vol. 28(2), pages 143-164, April.
    18. Dietrich, Franz & List, Christian, 2016. "Mentalism Versus Behaviourism In Economics: A Philosophy-Of-Science Perspective," Economics and Philosophy, Cambridge University Press, vol. 32(2), pages 249-281, July.
    19. Guilhem Lecouteux & Ivan Mitrouchev, 2022. "Preference purification in behavioural welfare economics: an impossibility result," Working Papers hal-03791972, HAL.
    20. Dorian Jullien, 2016. "All Frames Created Equal are Not Identical: On the Structure of Kahneman and Tversky's Framing Effects," GREDEG Working Papers 2016-17, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    21. Mattauch, Linus & Hepburn, Cameron, 2016. "Climate policy when preferences are endogenous – and sometimes they are," INET Oxford Working Papers 2016-04, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:hal:pseose:halshs-01249514 is not listed on IDEAS
    2. Boissonnet, Niels & Ghersengorin, Alexis & Gleyze, Simon, 2020. "Revealed Deliberate Preference Changes," MPRA Paper 101756, University Library of Munich, Germany.
    3. Boissonnet, Niels & Ghersengorin, Alexis & Gleyze, Simon, 2023. "Revealed deliberate preference change," Games and Economic Behavior, Elsevier, vol. 142(C), pages 357-367.
    4. Jacobs Martin, 2016. "Accounting for Changing Tastes: Approaches to Explaining Unstable Individual Preferences," Review of Economics, De Gruyter, vol. 67(2), pages 121-183, August.
    5. Dietrich, Franz & List, Christian, 2013. "Reason-Based Rationalization," MPRA Paper 51776, University Library of Munich, Germany.
    6. Hassan Nosratabadi, 2017. "Referential Revealed Preference Theory," Departmental Working Papers 201705, Rutgers University, Department of Economics.
    7. Paola Manzini & Marco Mariotti, 2015. "State dependent choice," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 45(2), pages 239-268, September.
    8. Nosratabadi, Hassan, 2022. "Reference-dependent choice under plurality rule," Mathematical Social Sciences, Elsevier, vol. 115(C), pages 88-98.
    9. Eddie Dekel & Barton L. Lipman, 2010. "How (Not) to Do Decision Theory," Annual Review of Economics, Annual Reviews, vol. 2(1), pages 257-282, September.
    10. Georgios, Gerasimou, 2013. "A Behavioural Model of Choice in the Presence of Decision Conflict," SIRE Discussion Papers 2013-25, Scottish Institute for Research in Economics (SIRE).
    11. Geoffroy de Clippel, 2014. "Behavioral Implementation," American Economic Review, American Economic Association, vol. 104(10), pages 2975-3002, October.
    12. Niels Boissonnet & Alexis Ghersengorin & Simon Gleyze, 2022. "Revealed Deliberate Preference Change," Working Papers hal-03672734, HAL.
    13. Tserenjigmid, Gerelt, 2019. "Choosing with the worst in mind: A reference-dependent model," Journal of Economic Behavior & Organization, Elsevier, vol. 157(C), pages 631-652.
    14. repec:cep:stitep:/2014/565 is not listed on IDEAS
    15. Ghosal, Sayantan & Dalton, Patricio, 2013. "Characterizing Behavioral Decisions with Choice Data," CAGE Online Working Paper Series 107, Competitive Advantage in the Global Economy (CAGE).
    16. Apesteguia, Jose & Ballester, Miguel A., 2013. "Choice by sequential procedures," Games and Economic Behavior, Elsevier, vol. 77(1), pages 90-99.
    17. Yusufcan Masatlioglu & Daisuke Nakajima & Erkut Y. Ozbay, 2012. "Revealed Attention," American Economic Review, American Economic Association, vol. 102(5), pages 2183-2205, August.
    18. Heller, Yuval, 2012. "Justifiable choice," Games and Economic Behavior, Elsevier, vol. 76(2), pages 375-390.
    19. Özgür Kıbrıs & Yusufcan Masatlioglu & Elchin Suleymanov, 2023. "A theory of reference point formation," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 75(1), pages 137-166, January.
    20. T. Hayashi & R. Jain & V. Korpela & M. Lombardi, 2023. "Behavioral strong implementation," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 76(4), pages 1257-1287, November.
    21. Manzini, Paola & Mariotti, Marco, 2010. "Moody choice," SIRE Discussion Papers 2010-15, Scottish Institute for Research in Economics (SIRE).
    22. Georgios Gerasimou, 2016. "Partially dominant choice," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 61(1), pages 127-145, January.

    More about this item

    Keywords

    Rational choice; reasons; context-dependence; bounded and sophisticated rationality; prediction of choice;
    All these keywords.

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:halshs-01249514. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.